Albania continues to lag behind in the race for the well-being of its citizens.

The latest updated Eurostat data (this is the second update) show that the country continued to be the last in Europe, both in terms of income per capita in relation to the size of the economy and in terms of income in relation to purchasing power, the latter being an indicator of the material well-being of families.

Although the economy is growing faster than the region, Albanian families and individuals are still poorer than those in neighboring countries, especially when measured by income according to purchasing power.

Income per capita in relation to Gross Domestic Product (GDP) was only 34% of the European Union average. Although it increased by three percentage points compared to the previous year, Albania is still the last in Europe (data for Kosovo are not reported).

The highest level in the region is held by Montenegro, with 50% of the European average, followed by Serbia with 44%, North Macedonia with 42%, and Bosnia and Herzegovina with 35%.

Except for Bosnia, the gap in income with other countries in the region has deepened, indicating a more sustainable development of neighboring states, which have managed to improve the well-being of their citizens at a faster pace.

The other indicator, that of individual consumption per capita, which measures income according to purchasing power or the well-being of a family, also places Albania at the bottom, along with Bosnia and Herzegovina.

This indicator is equivalent to 41% of the European average for Albania. Bosnia and Herzegovina have worsened, where the ratio is the same as in Albania at 41%, down from 42% in the first update.

Montenegro holds the record with 63%, Serbia with 53%, and North Macedonia with 50%.

According to Eurostat, Actual Individual Consumption refers to all goods and services currently consumed by households. Although GDP per capita is an important and widely used indicator of the economic well-being of countries, consumption per capita may be more useful for comparing the relative well-being of consumers in different countries, explains the Institute of Statistics (INSTAT).

Europe

In 2022, levels of Actual Individual Consumption (AIC) in the European Union showed considerable differences. Used as a measure of the material well-being of families, AIC per capita expressed in Purchasing Power Standards (PPS) ranged from 69% to 138% of the EU average in EU countries.

As in previous years, Luxembourg recorded the highest level of AIC per capita in the EU, 38% above the EU average, followed by Austria and Germany (both 18% above), the Netherlands (16% above), and Belgium (15% above). In 2022, nine EU countries recorded AIC per capita above the EU average.

The lowest levels of AIC per capita were recorded in Bulgaria (31% below the EU average), Hungary (29% below), Croatia and Latvia (both 24%), and Slovakia (23% below).

Over the past three years, AIC per capita in relation to the EU average has changed in most EU countries. Between 2020 and 2022, AIC levels increased in 18 EU countries, most notably in Bulgaria (69% of the EU average in 2022 compared to 60% in 2020), Croatia (76% from 69%), Romania (86% from 81%), and Ireland (94% from 89%).

On the other hand, in seven EU countries, there was a decline in individual consumption levels.

The largest declines were recorded in Denmark (110% in 2022 compared to 121% in 2020), Germany (118% compared to 124%), and Finland (109% compared to 114%).

Luxembourg and Ireland still have the highest AIC per capita in 2022

In 2022, as in 2020 and 2021, Luxembourg and Ireland recorded the highest AIC per capita expressed in PPS in the EU, at 156% and 135% above the EU average, respectively.

The data show significant differences between EU countries in terms of AIC per capita, used to measure economic activity. After Luxembourg and Ireland, Denmark (36% above the EU average), the Netherlands (30% above), Austria (24% above), and Belgium (20% above) are at the top of the list with AIC per capita more than 20% above the average.

On the contrary, Bulgaria (38% below the EU average), Greece (33% below), and Slovakia (29% below) recorded the lowest AIC per capita.